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Temporary Regulations For IRA Annuity Conversions To Roth IRA

The IRS has released temporary regulations to address the issue of determining the fair market value of insurance products during a conversion to a Roth IRA. In certain instances products were being sold that would have a deflated fair market value at the time of conversion , resulting in a transaction that the IRS would view as underreporting of the true taxable amount. The regulations provide guidance on valuing the annuity involved in the transaction to prevent any abuses. They are effective for distributions on or after August 19, 2005 . The regulations can be found here .